Tories to cut rate of spending on NHS

Health spending would rise much more slowly under a Tory government than it
has under Labour, the Conservatives have announced for the first time.

This is the first time that the Tories have said that their budget increases for health would be smaller than Labour'sPhoto: EDDIE MULHOLLAND

By James Kirkup, Political Correspondent

10:00PM BST 09 Sep 2009

Andrew Lansley, the shadow health secretary, said that the Tories would cut the rate at which NHS spending was increasing.

The health service would have to “tighten its belt” and accept small increases in its budget, he added.

While insisting that the Conservatives would make real-terms increases in health spending, he said that these would not match the scale of the growth under Labour.

Dampening any expectations of big budget increases for the NHS under the Tories, Mr Lansley warned health managers that they would have to share in the pain that awaits all parts of the public sector, in order to pay off the massive national debt built up under Labour.

The shift in tone from the Tories followed Labour also altering its message on health, giving warning that the NHS could be squeezed in the next Whitehall spending round, which begins in 2011.

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In a speech to NHS managers in Birmingham, Mr Lansley said that the Tories were not offering them “a blank cheque” and NHS trusts would have to make “real savings.”

Hospitals would face a “significantly reduced rate of expenditure” from the annual increases enjoyed under Labour, he said. Tory aides said that Mr Lansley’s message was a statement of economic reality.

However, it marked the first time that the Tories had explicitly said that their budget increases for health would be smaller than those already delivered by Labour.

The NHS budget will rise in real terms from £35?billion in 1997-98 to £110billion in 2010-11. Health spending in the current three-year spending round has been rising by four per cent a year.

Labour has refused to set out details of its spending plans beyond 2011. Neither have the Tories, but Mr Lansley’s words signalled that any annual rise in health spending would be well below four per cent.

With the national debt on course to hit £1.4trillion, economists said that a major squeeze on public spending was inevitable in the years ahead.

David Cameron has said that the NHS is his top priority. Health, along with overseas aid, are the only Whitehall budgets that the Tories have promised to protect from the spending cuts they say will be required after the next election. The decision to ring-fence health antagonised some Right-wing Tories, who said that the NHS should not be excluded from money-saving reforms.

With the public finances worsening sharply and Labour giving ground on spending, Mr Cameron’s team is stepping up the Tory rhetoric on austerity, in an attempt to prepare voters for what could be uncomfortable and controversial cuts. In his speech, Mr Lansley said: “We’ve pledged real-terms increases in NHS expenditure to help our health service rise to the challenges of the 21st century. Our commitment will still mean a significantly reduced rate of expenditure, and it’s by no means a blank cheque.

“Even with small increases, NHS services everywhere will have to tighten their belts just to meet demand.

He added: “A real-terms increase in expenditure has to go hand in hand with real savings, which can be ploughed back into front line services to meet the needs of an ageing population and drag up our health care results.”

The Institute for Fiscal Studies, the independent financial analyst, has projected that increasing the NHS budget by 2.5 per cent above inflation in every year between 2011 and 2017 would require all other Whitehall budgets to be cut by 16 per cent.

Mr Lansley said: “At a time when other parts of the public sector will be facing painful funding constraints, how will NHS staff look

taxpayers in the eye and justify the priority they receive without real improvements in efficiency and results?”

Earlier this week, Alistair Darling, the Chancellor, gave warning of “hard choices on public spending”, and signalled that Labour would include the NHS in a drive to make savings.

A Conservative spokesman said that the party’s message on health spending was being refined in the light of the economic situation. “We have to face facts. There is a recession and the public finances are in a mess. Labour doubled health spending. We’re not going to get near that,” he added.